Qantas has hit back at suggestions by Nationals Senator Bridget McKenzie that it should divest itself of subsidiary budget carrier Jetstar to reduce anti-competitive behaviour.
McKenzie, the Coalition’s transport spokesperson, called for the government to expand divestiture powers to the aviation industry on Monday in a bid to expand competition in the aviation sector, which is dominated by Qantas and Virgin.
She pushed for the power to break up the partnered airlines should anticompetitive behaviour occur — but Qantas said the industry watchdog had raised no such issues.
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“Qantas raises prices when Jetstar, an affiliated airline, enters the market, suggesting the presence of Jetstar allows Qantas to exercise a greater degree of price discrimination,” McKenzie wrote in the AFR piece. She said they were not her words, but the conclusion of the Treasury.
A Qantas spokesman told 7NEWS.com.au the ACCC had been actively monitoring the aviation industry for the past four years and had made no findings of anticompetitive behaviour.
He said the ACCC’s latest airline monitoring report found that real and nominal domestic fares were continuing to trend down, and that Qantas and Jetstar international fares were both lower than they were last financial year, adjusted for inflation.
Last financial year, Jetstar offered 12 million fares for less than $100, the Qantas spokesman said.
But Nationals Leader David Littleproud claimed media reports about McKenzie’s calls for Qantas and Jetstar to split had misrepresented her opinion piece, which was about “greater powers of the ACCC and what they might look like”.
Qantas Group’s domestic market share is over 60 per cent, with Virgin taking about 33 per cent of domestic travellers in Australia, together creating what former ACCC boss Rod Sims called an “effective duopoly” in a 2023 aviation inquiry report.
Experts involved in that inquiry were divided on the topic of aviation divestiture, and while Sims said it should be considered, he added that in the sector “divestiture is not so much the issue; the slots are the issue”.
Some of the recommendations made in the 2023 inquiry report have since been echoed in the Airline Passenger Protections (Pay on Delay) Bill 2024 which McKenzie introduced as a private senator’s bill to the Senate in February, to push a range of obligations for carriers.
If passed through the parliament, the bill would require the transport minister to establish a set of rules which include a “minimum standard of treatment” for passengers,
That includes standards for passengers who experience delays, cancellations or denial of boarding, in situations within the carrier’s control, “including in situations of mechanical malfunctions”.
The bill was last debated in a second Senate reading in May, and was referred to the Senate Rural and Regional Affairs and Transport Legislation Committee. A report by the Committee is due in November.
